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LSI layoffs not result of acquisition, according to company. [The Morning Call (Allentown, Pa.) :: ]

[January 31, 2014]

LSI layoffs not result of acquisition, according to company. [The Morning Call (Allentown, Pa.) :: ]

(Morning Call (Allentown, PA) Via Acquire Media NewsEdge) Jan. 31--LSI Corp. has laid off workers from its Lehigh Valley facility in recent weeks, a month after the semiconductor chipmaker agreed to sell itself to a competitor.

LSI spokesman David Miller said in an email that the job cuts were "part of previously announced cost controls" and "not related to the acquisition."
In December, Avago Technologies Ltd., whose semiconductor chips are used in Apple products, announced it would buy LSI Corp. of San Jose, Calif., for $6.6 billion.

LSI came to the Lehigh Valley in 2006, when it took over Agere Systems of Hanover Township, Lehigh County. Agere traced its roots to AT&T's research division, the renowned Bell Labs. Some of Bell's innovations were developed in the Lehigh Valley, and its factory on Union Boulevard in Allentown was the site of the first production line for transistors.

LSI -- whose chips are sold to a range of customers, primarily for storage devices such as hard disks and flash drives -- has retained a major presence at the old Agere campus next to Route 22, employing 720 engineers and other high-tech workers at the time of the Avago acquisition.

Miller did not say how many of those workers have gotten pink slips since then. Though, the number is believed to be in the dozens, including many workers for whom today is to be their last day.

Though the Avago acquisition has yet to be completed, it has already attracted the attention of at least one law firm. Dallas firm Deans & Lyons issued a news release on Jan. 17 soliciting LSI shareholders for participation in a "potential lawsuit."
"[The] suit will determine if the board of directors at LSI properly shopped the company before entering into an agreement with Avago," securities lawyer Hamilton Lindley said. "[It] will seek to ensure that LSI Corporation shareholders receive the highest price reasonably available for their stock."
Miller said LSI's policy is to "never comment on legal matters."
Avago is funding its LSI acquisition with a $4.6 billion term loan from a group of banks, a $1 billion investment from private equity group Silver Lake Partners and $1 billion of cash in hand. Its cash offer of $11.15 per share was a 41 percent premium to LSI's closing price at the time.

Avago, which has headquarters in both San Jose and Singapore, already has a toehold in the Lehigh Valley. In April, it announced its $400 million purchase of CyOptics Inc., a maker of fiber-optic components in Breinigsville.